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Oil! Massive shale discovery in Texas

By on 8 Sep 2016 in news, notable posts with 0 Comments
Oil! Massive shale discovery in Texas

(CNN) Apache ( APA ) revealed the huge find this week after more than two years of stealthily buying up land, extensive geological research and rigorous testing.

The Houston company estimates the discovery, dubbed “Alpine High,” could be worth at least $8 billion.

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OPEC Monthly Oil Market Report August 2016

By on 22 Aug 2016 in news, notable posts with 0 Comments
OPEC Monthly Oil Market Report August 2016

(peakoilbarrel.com) When oil fell below $30 a barrel earlier this year, banks turned away from lending to energy companies. The price of crude has bounced back more than 80% from its February low, but banks are still wary.

Big banks cut loans to the energy sector by about 3% in the second quarter over all and some individual lenders pulled back much more, according to an analysis of July and August securities filings by Barclays analysts.

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Oil prices slip as short-covering rally fizzles

By on 8 Aug 2016 in news, notable posts with 0 Comments
Oil prices slip as short-covering rally fizzles

(Reuters) A worker walks at Nahr Bin Umar oil field, north of Basra, Iraq December 21, 2015. Oil prices dipped on Friday, ending a two-day rally, as a glut of crude and refined products weighed on markets and investors eyed a possible stutter in China’s imports.

U.S. West Texas Intermediate (WTI) crude futures CLc1 fetched $41.74 per barrel at 0930 GMT (0530 ET), down 19 cents from their last close, after trading as low as $41.44 earlier in the day. They were on track roughly to break even on the week.

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Analysis

Oil glut seen extending into 2017 on weaker demand

By on 13 Sep 2016 in analysis, notable posts with 0 Comments
Oil glut seen extending into 2017 on weaker demand

(Toronto Star) The much-anticipated rebalancing of oil markets appears to be a bit further away after the International Energy Agency revised its forecast, trimming its expectations for the growth in oil demand and citing near-record production by OPEC’s Middle East exporters.

The IEA said Tuesday that global oil demand is rising at a slower pace than expected, lowering its forecast by 100,000 barrels a day to an increase of 1.3 million barrels a day in 2016 and 1.2 million barrels a day in 2017.

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Are Shale-Oil Companies Starting to Weather the Crude Slide?

By on 5 Aug 2016 in analysis, notable posts with 0 Comments
Are Shale-Oil Companies Starting to Weather the Crude Slide?

(Wall Street Journal) A truck used to carry sand for fracking is washed in a truck stop on February 4, 2015 in Odessa, Texas. … Debt from U.S. shale companies has held its ground even as oil prices have beat a fast retreat, a sign the firms may have adapted to an era of cheaper crude and could remain key suppliers to the market.

A build-up in stockpiles of oil has renewed downward pressure on prices: U.S. crude is now at roughly $42 the barrel, 14% below where it was at the beginning of June, when it appeared to be rallying.

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The One Chart That Shows Why Oil Prices Have To Keep Rising

By on 28 Jun 2016 in analysis, notable posts with 0 Comments
The One Chart That Shows Why Oil Prices Have To Keep Rising

(oilprice.com) There has been a lot of pessimism among oil investors in recent months, and indeed the bear market over the last couple of years in black gold has destroyed many nest eggs. With that said, oil investors who have run for the hills could find themselves regretting that decision in the months and years to come.

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Viewpoints

What Hubbert Got Really Wrong About Oil

By on 8 Sep 2016 in notable posts, viewpoints with 0 Comments
What Hubbert Got Really Wrong About Oil

(Forbes) If you happen to be someone who is interested in the topic of “peak oil”, you know the name M. King Hubbert.

The history of the scientific study of peak oil dates to the 1950s, when Hubbert, a Shell geophysicist, reported on studies he had undertaken regarding the production rates of oil and gas fields.

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Is the Oil Industry Dying?

By on 10 Aug 2016 in notable posts, viewpoints with 1 Comment
Is the Oil Industry Dying?

(psmag.com) Talking about “peak oil” can feel very last decade. In fact, the question is still current. Petroleum markets are so glutted and prices are so low that most industry commenters think any worry about future oil supplies is pointless. The glut and price dip, however, are hardly indications of a healthy industry; instead, they are symptoms of an increasing inability to match production cost, supply, and demand in a way that’s profitable for producers but affordable for society. Is this what peak oil looks like?

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The Death of OPEC

By on 26 Jul 2016 in notable posts, viewpoints with 0 Comments
The Death of OPEC

(Project Syndicate) The Organization of the Petroleum Exporting Countries is dead. Saudi Arabia killed it. Now, OPEC is just a toothless zombie, attracting attention, but without having any impact on the living.

Few have noticed OPEC’s demise for a simple reason: it never really had the impact that it was widely perceived to have. It was never actually a cartel, possessing monopolistic market power. Anyone who thought otherwise was mistakenly attributing to it Saudi Arabia’s market power.

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Other Recent Posts

The Global LNG Price Dynamics

By on 18 Sep 2017 in quotes with 0 Comments

[In commenting on India forcing ExxonMobil to renegotiate LNG prices] “This trend is overall a negative for sellers, as they are forced to provide more flexibility to buyers’ needs to maintain their markets. The risk of price renegotiations will become more acute over the next couple years as spot LNG prices remain depressed, even if oil-linked prices rise. The elephant in the room will be how negotiations play out with traditional markets in Japan and Korea, and especially the Chinese national oil companies.”

Saul Kavonic, analyst with Wood Mackenzie

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Peak Oil Review – 18 Sep 2017

By on 18 Sep 2017 in Peak Oil Review with 0 Comments
Peak Oil Review – 18 Sep 2017

Oil prices rose steadily last week with US crude futures briefly topping the psychological barrier of $50 a barrel and with London futures closing at $55.62. Most analysts are talking about higher prices ahead. The IEA’s monthly report says that the global oil supply contracted in the past month and that demand remains strong. These judgments came despite the US hurricanes that shut down over 25 percent of US refining capacity and took a good, but as yet unknown, bite out US demand in the Southeastern US and along the Gulf Coast.

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The US Delusion with respect to Energy Abundance

By on 11 Sep 2017 in quotes with 0 Comments

“…The US is deluding itself when it comes to energy abundance (generally) and oil (specifically). Yet that’s not what we hear from the cheerleaders in the industry or in our media. From them, we hear a silver-tongued narrative of coming riches — a narrative that contains some truth, some myth, and a lot of fantasy. It’s those last two parts — the myths and fantasies — that are going to seriously hurt many investors, as well cause a lot of extremely poor policy and investment decisions.”

Chris Martenson, commentator at www.peakprosperity.com, former investments manager

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Peak Oil Review – 11 Sep 2017

By on 11 Sep 2017 in Peak Oil Review with 0 Comments
Peak Oil Review – 11 Sep 2017

Oil prices rose some $3 a barrel for the first three days last week and then collapsed on Thursday and Friday as Beijing announced its plans to reduce the capacity of its small “teapot” refineries, and Hurricane Irma closed in on Florida reducing demand for oil products in the state. Recovery from the Texas hurricane, Harvey, continues with 8 of 20 refineries that were closed by the hurricane now back to normal operations. The ports of Corpus Christi and Houston are returning to normal, and several other refineries report they will be back in operation in the next week or two. Gasoline prices in the US are starting to retreat from storm-induced spikes as refineries and pipelines return to normal. The unusually large crude and product reserves in stockpiles have helped cushion price increases.

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NAFTA and Energy Trade Across North American Borders

By on 4 Sep 2017 in quotes with 0 Comments

“Any changes that disrupt energy trade across our North American borders, reduce investment protection or revert to high tariffs and trade barriers that preceded NAFTA could put at risk tens of millions of jobs.”

From top oil and gas trade groups from the US, Canada. and Mexico, in a joint position paper released last month prior to new NAFTA-related talks.

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Peak Oil Review – 4 Sep 2017

By on 4 Sep 2017 in Peak Oil Review with 0 Comments
Peak Oil Review – 4 Sep 2017

As the severe flooding spread further east last week, closing down numerous refineries and causing widespread devastation, it is becoming apparent that it will be several weeks before the full impact on the US oil industry and indeed global oil markets can be assessed. At one point last week the hurricane shut down a quarter of US refining capacity, some 4.0-4.4 million b/d, but oil production outages mostly from Gulf production came to less than 1 million b/d. With a lot of oil going into storage and refinery demand well below normal, US oil prices have moved very little in the past week, while Brent has remained stronger in anticipation that Europe will be called on to replace the missing US barrels in the next few weeks.

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Drilling off the Atlantic Coast

By on 28 Aug 2017 in quotes with 0 Comments

“It will likely be years before the oil and gas industry can start drilling off the Atlantic coast, even in the best-case scenario. But even then, it is unclear if there will be any interest. The Atlantic has not been explored very much, and as a result, the exact nature of the oil and gas reserves in place is unknown. That likely means that development costs will be high. If oil prices fail to rise much from current levels, it is not at all clear that the Atlantic will be very competitive.”

Nick Cunningham, Oilprice.com

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Peak Oil Review – 28 Aug 2017

By on 28 Aug 2017 in Peak Oil Review with 0 Comments
Peak Oil Review – 28 Aug 2017

It likely will take several weeks to assess the impact that Hurricane Harvey will have on the US oil industry.  As of Monday morning, the storm is still dumping large amounts of rain on Houston and its refineries. Weather forecasts are predicting that the storm will continue to cause heavy flooding along the Gulf Coast and will move further east, possibly closing or damaging additional oil production facilities in Louisiana.

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The Correlation between Interest Rates and Oil Prices

By on 21 Aug 2017 in quotes with 0 Comments

“When interest rates fall, this tends to allow oil prices to rise, and thus allows increased production. This postpones the Peak Oil crisis, but makes the ultimate crisis worse…Falling interest rates between 1981 and 2014 are one of the things that allowed Peak Oil to be postponed for many years…. Peak Economy is likely not very far away. We do not need to encourage it, by raising interest rates and selling securities held by the Federal Reserve. We badly need more people to understand the connection between interest rates and oil prices, and how important it is that interest rates not rise.”

Gail Tverberg, actuary and commentator (8/16)

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Peak Oil Review – 21 Aug 2017

By on 21 Aug 2017 in Peak Oil Review with 0 Comments
Peak Oil Review – 21 Aug 2017

Oil continues to trade in one of the narrowest ranges seen in the last decade as the efficacy of the OPEC production cap weighs against increasing US and other production increases and slowing Chinese demand.  Last week saw oil prices falling for three days and then rebounding sharply on Friday to close at $48.50 in New York as a combination of a large drop in US crude stocks, a weaker US dollar, and a falling rig count supported prices.

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